Tonight's "The Big Idea" - Lowered Expectations with Jim Cramer

NEW -> Contingent Buyer Assistance Program
[quote author="EvaLSeraphim" date=1224459043][quote author="xsocal land merchant" date=1224403853]WestparkRenter



Very interesting article. I used to live in San Clemente near the San Onofre Power Plant and realized that there was only one way out if something happened to I-5.



I lived south of access to PCH.



I had found an escape route thru Camp Pendleton that would allow a 4 wheel drive vehicle to go thru the base and exit near Temecula.(yes I tresspassed on government property)



If there was an earthquake or mass exodus due to a problem at San Onofre I wanted an alternate way out of South County especially if I-5 was jammed.



The ability to survive for several days in ones home is not unrealistic. What if there was a problem that caused the power grid to fail and you couldn't get money from the ATM, gas, and your freezer/refidge was off for several days.



Densely populated areas like Mission Viejo, Irvine, Laguna Niguel, and NB would become very interesting, to say the least.



Bix would survive with his Thompson.



Enjoy!</blockquote>


Heh. Been there - the natural disaster (Loma Prieta earthquake) and the road as well.



If you keep in your home the goods that you would need to camp for a week (e.g., tent, sleeping bag, propane stove, cast iron cookware (pan, dutch oven), canned goods, and water), you will likely be fine. Most people were so shell shocked by the experience that order didn't break down where I was at, and, in fact, it brought the neighbors (few of whom knew each other) together to get through the mess collectively.



On a different note, there might be some similarities between the continuing financial crisis and the Great Depression, but one thing that will make a huge difference is the FDIC. During the Depression (and beforehand), depositors assumed the risk of bank failures. In other words, if you were excellent saver, but Joe the town banker was speculative in his lending, you were screwed when the bank went belly up because your savings (and any other deposits) were long gone and you had no recourse. At least with FDIC insurance, the savings and other deposits of most people are guaranteed. (With the caveat that, yes, Congress could choose to not appropriate more money to the FDIC. While possible, I don't think it is probable.)</blockquote>


Judging from the number of kids that were in the Halloween store last night, I don't think there is an economic recession yet. Same with the restaurant Olive Garden.
 
Fascinating presentation <a href="http://www.iwillteachyoutoberich.com/blog/behind-the-curtain-how-silicon-valley-companies-are-handling-the-downturn">from the folks at Sequoia</a>. I think their advice for businesses would be useful for households as well.
 
[quote author="EvaLSeraphim" date=1224471032]Fascinating presentation <a href="http://www.iwillteachyoutoberich.com/blog/behind-the-curtain-how-silicon-valley-companies-are-handling-the-downturn">from the folks at Sequoia</a>. I think their advice for businesses would be useful for households as well.</blockquote>


<a href="http://bits.blogs.nytimes.com/2008/10/10/rip-good-times-sequoia-capital-warns/">http://bits.blogs.nytimes.com/2008/10/10/rip-good-times-sequoia-capital-warns/</a>
 
[quote author="JLegend" date=1224379716]I'm taking a hiatus from this board. The Sky is Falling around this forum, as if the economy will never recover. It's getting a bit ridiculous.



I am not in denial of the dire straights we are in, and I acknowledge it will last well through 2009 and even 2010, but shit, some of you make it sound like we are turning into a 3rd world country. It will be tough for everyone, for sure, the rich, the not so rich. And it seems as if you all take pleasure (and for some reason still exhibit surprise) at all the listings in this market. What do you expect, that no one will be buying and selling in this market? People need to live, and people need to sell for whatever reason. I really do hope that many of you are millionaires here since you all have the crystal ball. If not, this is just another place of theoretical exercise.</blockquote>


Nobody is saying the economy will never recover. What we are saying is that certain lifestyles will never return, and many people may experience a decline in their standard of living for quite some time. This isn't the fall of the American Empire. The Visigoths are not storming the walls, but the bill collectors are knocking on our doors, and now we have to pay them.
 
[quote author="ConsiderAgain" date=1224381185]I started my new job in Huntington Beach three weeks ago and the most common thing people have spoke to me about, as well as the hallway chatter, is housing and have I bought a house yet. I agree with IR that the general public does not have a grasp of what is to come.



I would guess 70% of my co-worker?s opinions are that local real estate has already fallen as much as it is going to and I had better buy before the imminent rise in prices. I truly don?t know how to respond to this and not alienate my new coworkers. I have gently asked a couple of people what they think about paying $700k+ for a house and both responded that you <em>?don?t really pay for the house, you just need to get a loan, that is the difficult part?</em> ?? Does anyone in OC actually plan on paying for their house?



I was well prepared for the price, or sticker shock if you will, of housing in OC. However, I seem to have little in common philosophically with my coworkers as I learn their perspectives. I wonder how their attitudes will change over the next two years.</blockquote>


The next big change we will see in the market is when people let go of the idea of perpetually servicing debt. The moment the general market accepts the idea that mortgage notes are supposed to be paid down with income, people are really going to stop borrowing money. Right now, people just want to take on as much debt as possible, service it for a while, and transfer that debt to some greater fool in the future. That mentality must die before the market bottoms.
 
[quote author="IrvineRenter" date=1224534202][quote author="JLegend" date=1224379716]I'm taking a hiatus from this board. The Sky is Falling around this forum, as if the economy will never recover. It's getting a bit ridiculous.</blockquote>


Nobody is saying the economy will never recover. What we are saying is that certain lifestyles will never return, and many people may experience a decline in their standard of living for quite some time.</blockquote>


jlegend,



i think what IR says makes a lot of sense. we will and cannot go back to the way things were. both the american govt and public borrowed at unprecedented levels to spurn the growth of the last few decades. even without the current financial crisis we would have been living beyond our means and the bill would have come due at soem point. no it wont be a third world country but this correction will merely get us back on track; not back to the way things were because that lifestyle, as we knew it, was unsustainable.
 
Good for for IR and acpme both, as I couldn't figure out how JL's conclusion was drawn from the posts prior to his. I still can't, but I'm glad you did.



In any event, no worries. Robin Hood Bernanke <a href="http://biz.yahoo.com/ap/081020/bernanke.html">appears poised to transfer yet more wealth from the savers to the debtors</a> (or, perhaps, their creditors).
 
[quote author="usctrojanman29" date=1224521365]Both of these guys are terds. Too bad Jim didn't work for Lehman so his family trust would have been sliced and diced.</blockquote>


I don't know their background. Could you explain why, please?
 
Life After the Bubble: How Japan Lost a Decade



<a href="http://www.nytimes.com/2008/10/19/weekinreview/19impoco.html?ref=worldbusiness">http://www.nytimes.com/2008/10/19/weekinreview/19impoco.html?ref=worldbusiness</a>



The Downturn?s Upside



<a href="http://www.nytimes.com/2008/10/19/opinion/19kristof.html?partner=rssnyt&emc=rss">http://www.nytimes.com/2008/10/19/opinion/19kristof.html?partner=rssnyt&emc=rss</a>
 
[quote author="EvaLSeraphim" date=1224541901]Good for for IR and acpme both, as I couldn't figure out how JL's conclusion was drawn from the posts prior to his. I still can't, but I'm glad you did.



In any event, no worries. Robin Hood Bernanke <a href="http://biz.yahoo.com/ap/081020/bernanke.html">appears poised to transfer yet more wealth from the savers to the debtors</a> (or, perhaps, their creditors).</blockquote>
Good old Donald is the chairman of Deutsch, Inc. (billion dollar marketing company founded by his daddy)...can you say silver spoon. In 2000, Donny sold his agency to the Interpublic Group of Companies (IPG) for a reported $265 million. He essentially bought himself to be on CNBC with that stupid ass show "The Big Idea."



So for Jimmy, he was a Goldman Sachs ex. employee who always kissed their ass. His show "Mad Money" has stock picks which have returns that monkeys picking stocks can beat. He's a blowhard and predicts that the bottom of the housing market will hit on 6/30/09. haha
 
[quote author="usctrojanman29" date=1224550450]So for Jimmy, he was a Goldman Sachs ex. employee who always kissed their ass. His show "Mad Money" has stock picks which have returns that monkeys picking stocks can beat. He's a blowhard and predicts that the bottom of the housing market will hit on 6/30/09. haha</blockquote>


There is an <a href="http://www.nytimes.com/2008/10/20/business/media/20carr.html">article the NY Times</a> that highlights a few of his missed calls. <a href="http://online.barrons.com/article/SB118681265755995100.html">Sometimes it is best to short Cramer</a>. I can't tell you how many times he recommended Countryfried on the way down. I really hope no one here bought CFC when he recommended them at $40 a share. Oh... and KB Homes, he was touting that he was friends with the CEO, and how they were such a great company about a year ago. It's not like I ever took him seriously in the first place, but after those calls I realized what a complete a total money wasting joke he is. Everyone says he is entertaining, but losing money on those stock picks is not funny, or entertaining for that matter.
 
[quote author="graphrix" date=1224554646][quote author="usctrojanman29" date=1224550450]So for Jimmy, he was a Goldman Sachs ex. employee who always kissed their ass. His show "Mad Money" has stock picks which have returns that monkeys picking stocks can beat. He's a blowhard and predicts that the bottom of the housing market will hit on 6/30/09. haha</blockquote>


There is an <a href="http://www.nytimes.com/2008/10/20/business/media/20carr.html">article the NY Times</a> that highlights a few of his missed calls. <a href="http://online.barrons.com/article/SB118681265755995100.html">Sometimes it is best to short Cramer</a>. I can't tell you how many times he recommended Countryfried on the way down. I really hope no one here bought CFC when he recommended them at $40 a share. Oh... and KB Homes, he was touting that he was friends with the CEO, and how they were such a great company about a year ago. It's not like I ever took him seriously in the first place, but after those calls I realized what a complete a total money wasting joke he is. Everyone says he is entertaining, but losing money on those stock picks is not funny, or entertaining for that matter.</blockquote>


In fairness, if you're a total shlub, you can do worse than follow Jim. He preaches a mantra of "do your own research". His meltdown with Erin Burnett (aka the Giraffe Blouse Episode) was epic. I think "Are you diversified" is fun and useful.



Most folks are better of dollar cost averaging ETFs like .spx than trading, but when A#1 cheerleaders like Donny and Jim say "Sorry, kids. Party's over for the most recent guilded age. Lower your expectations, and lower the expectations of your children." you kind of got to pay attention. The fix is indeed in.
 
i won't get into whether cramer's picks are good or not, but the fact that's he's so influential makes his recommendations dangerous for the avg investor. even though the premise of mad money is how the john q investor can beat the market, investing in picks that get whipsawed around by cramer's big mouth is exactly what john q should be avoiding.



just like noVas said, the key to using the advice of financial pundits is DO YOUR OWN DUE DILIGENCE! most folks forget 2 impt things when listening to a stock pick.



1) whats the price?

i hear way too many people say something like, cramer likes this stock. when? a wk ago? did the price already run up?



2) what's it do to your portfolio?

lets say cramer likes MSFT and CSCO. great. if you follow those picks, you're making an implicit bet on tech. is that what you're really trying to do? most people just buy $X of cramer's pick without considering what that does to their overall portfolio allocation/risk.
 
Jim is an entertainer and should not be confused with something else. He tries to offer a physical embodiment of the manic, momentum-driven personality of the equities market itself, and does a good job capturing that. I also think he is consistent about encouraging people to be proactive and research-minded in terms of their own investment life. I think his focus on stockpicking is very dangerous for most investors, though nothing is more dangerous than just making the big, dumb mistakes (like being set-it-and-forget-it in something like VFINX in your IRA 100% a year ago, or being too slow-witted to make some money of the current stock rally now).
 
I think IR should pitch his book on Donny?s show.

It fits the success concept the shows producers are looking for.

Started out profiling properties on a local blog, parlayed that into a lucrative book deal.

They cover real estate, maybe IR could discuss his book and the market with other guest like Don Peebles or Donald Trump Jr.



IR, pm me if you need an agent.

My rates are reasonable.

In addition, my dad is friends with Scott Boras.

If we run into trouble we?ll ask him what to do.
 
You must log in or register to reply here.
Back
Top